Business License Exemptions

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 Type of Business / Activity

Reason for Exemption

Auctioneers

State of CA Business & Professions Code Section 5714: Auctioneers are only exempt from business tax when their primary place of business is outside of SLO. Auction companies located in SLO are subject to business tax.

Child Care of 8 or less

 Health & Safety Code Section 1597.45: "No local jurisdiction shall impose any business license,m fee, or tax for the privilege of operating a small daycare home."

Bail Bond Agents

Hughes v. Los Angeles, 168 Cal. 764: "There are classes of businesses -- those of local insurance agents and those of bail agents - in which persons may engage without subject to local taxation."

Blind Vending Facility Operator

Any blind vending facility operator who qualifies via registration with the California Business Enterprises Program shall have their business license fee waived. Taxes must still be paid. (Welfare & Institutions Code 19633)

Café Musicians

Business & Professions Code Section 16000.5: They are only exempt from regulatory licenses. This does not apply for taxation.

Financial Institutions

Banks & other financial institutions that pay the Bank and Corporation Tax to the State of California are exempt from local business taxation.

Federal Credit Unions

Exempt through:
• In-lieu tax
• Taxation code 1768 for credit union
• Non-profit status

Insurance Agents
Insurance Brokers

Exempt under California Constitution Act. 13, Sect. 28: Are NOT exempt since they act as independent contractors.

Honorably Discharged Veterans

Honorably discharged veterans, who are California residents, that hawk, peddle or vend any good excepting alchohol, are exempt from paying an otherwise required City buisness license fee. Taxes must still be paid. (Business and Professions Code. 16001.7.)

Liquor & Alcohol Wholesalers

California Constitution, Art. 20, Section 22: Are exempt from local business tax based on federal & state constitution that gives the ABC an exclusive right to tax this type of business.

Minors (under 18 years of age)

The following conditions must exist and legal documentation must be provided to support that:
• All persons engaged in the operation of the business are under the age of 18 years.
• All persons engaged in the operation of the business have a bona fide ownership interest in the business.

Moving & Transportation Companies, Common Carriers (i.e. FedEx)

Public Utilities Code 4301 etc.: Companies that operate a statewide moving business are exempt from local taxation through the Public Utilities Commission. Companies operating solely within city limits will need a local license.

Non-Profit or Charitable Institutions

Government Code Section 37101: They have to submit IRS Tax Exemption letter.

Religious Activities

Religious organizations are exempt from taxation by the Bill of Rights.

Residential Care Centers of 6 or less

Health & Safety Code, Section 1566.2: A residential care facility, which serves 6 or fewer people, shall not be subject to any business tax, local registration fees, use permit fees, or other fees to which other family dwellings of the same type in the same zone are not likewise subject.

Special Events

Businesses participating in one day special events in the city (i.e. Holiday in the Plaza) may choose to pay 10% of their sales on that day to the Parks and Rec. department. This is done through Parks and Rec. when they register for the event.

Wholesale Salesmen

Revenue & Professions Code, Section 16002: No license fee may be collected from any commercial traveler whose business is limited to goods, wares, & merchandise sold or dealt in at wholesale in this State.